My preparation for the trading day
News overview. My trading day begins with a careful analysis of the overnight news. I focus on significant developments that could potentially impact the market, and pay particular attention to events that could have immediate effects on the opening price, such as changes in the Chinese currency value or Japanese monetary policy.
Chart analysis. I take the time to thoroughly review my charts: gaining an understanding of past trends and identifying potential trading opportunities for the current day.
Market analysis. I analyse how the market closed on the previous day and evaluate this closing price in the context of the day's performance and in comparison to previous closing prices. It is important for me to understand how the value has evolved over time to make an informed assessment of the strength of the current market direction.
Market opening. The opening is a critical moment. In the stock markets it often depends heavily on the performance of the S&P. If the S&P closed at 4376 the previous day and is trading at 4315 this morning, that provides important clues about the expected opening of the DAX. I also take into account the analyses of brokers.
Initial trading opportunities and daily expectations. I consider what first decisions I could make at the open, and plan how I will react if the market opens as expected, above or below. I set clear expectations for the day: the likely course, price ranges, possible trends.
Line in the sand. I define threshold levels below which I would revise my initial expectations. These thresholds mark the point at which my view of the market changes.
Key levels and volume areas. I mark price levels relevant to my strategy and identify volume areas such as zones with noticeable trading volume or where volume has significantly increased. These can point to turning points.
Planned trades, updated information, daily review. I note trades I intend to take independently of the general development. I keep an eye on scheduled speeches and press conferences. At the end of the day I analyse the day's course, summarise what happened and draw lessons from it.
This method is designed to prepare effectively for the trading day and to adapt flexibly to changes in the market. Continuous review and adjustment of the strategy are crucial.